N-CSR 1 a_coreequity.htm PUTNAM FUNDS TRUST a_coreequity.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES



Investment Company Act file number: (811-07513)
Exact name of registrant as specified in charter: Putnam Funds Trust
Address of principal executive offices: 100 Federal Street, Boston, Massachusetts 02110
Name and address of agent for service: Stephen Tate, Vice President
100 Federal Street
Boston, Massachusetts 02110
Copy to:         Bryan Chegwidden, Esq.
Ropes & Gray LLP
1211 Avenue of the Americas
New York, New York 10036
         James E. Thomas, Esq.
Ropes & Gray LLP
800 Boylston Street
Boston, Massachusetts 02199
Registrant’s telephone number, including area code: (617) 292-1000
Date of fiscal year end: April 30, 2023
Date of reporting period: May 1, 2022 – April 30, 2023



Item 1. Report to Stockholders:

The following is a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Investment Company Act of 1940:


 

 

Message from the Trustees

June 6, 2023

Dear Fellow Shareholder:

Stocks and bonds have generally advanced since the start of the year despite market ups and downs. Inflation has fallen but remains a concern for the Federal Reserve. U.S. interest rates have risen to their highest level since 2007, which is putting pressure on corporate earnings and causing stress in the banking system.

Fortunately, a strong pulse of innovation in the broader economy is gaining investor attention. International markets are becoming increasingly dynamic, in part because China’s economy is reopening after years of pandemic-related restrictions.

While remaining alert to market risks, your investment team is finding new and attractive opportunities across sectors, industries, and global markets. This report offers an update about their efforts in managing your fund.

Thank you for investing with Putnam.


 


Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. Share price, principal value, and return will fluctuate, and you may have a gain or a loss when you sell your shares. Performance of class A shares assumes reinvestment of distributions and does not account for taxes. Fund returns in the bar chart do not reflect a sales charge of 5.75%; had they, returns would have been lower. See below and pages 6–8 for additional performance information. For a portion of the periods, the fund had expense limitations, without which returns would have been lower. To obtain the most recent month-end performance, visit putnam.com.

Lipper peer group median is provided by Lipper, a Refinitiv company.


This comparison shows your fund’s performance in the context of broad market indexes for the 12 months ended 4/30/23. See above and pages 6–8 for additional fund performance information. Index descriptions can be found on page 10.

All Bloomberg indices are provided by Bloomberg Index Services Limited.

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How were conditions for stock market investors during the reporting period?

Stocks delivered modest gains in a period challenged by many macroeconomic issues. From the start of the period, rising interest rates, supply chain disruptions, the Russia-Ukraine War, and a slowdown in global growth weighed on investor sentiment. Among the headwinds for investors was historically high inflation and the efforts by central banks to tame it. Inflation in the U.S. reached 40-year highs, and in early 2022, the U.S. Federal Reserve began its most rapid series of interest-rate increases since the early 1980s. Along the way, investors feared the Fed’s monetary tightening would push the economy into a recession. Overall, last year was very challenging for stocks, which declined more than 19% for the 2022 calendar year, as measured by the Russell 3000 Index.

In late 2022, inflation, as measured by the Consumer Price Index, began to show signs of easing. With the prospect of lower interest rates, 2023 began on a bright note and stocks posted solid gains in January. However, recession concerns escalated in February, and new worries emerged in March. The banking industry experienced the bankruptcies of

Core Equity Fund 3 

 

 


Allocations are shown as a percentage of the fund’s net assets as of 4/30/23. Cash and net other assets, if any, represent the market value weights of cash, derivatives, short-term securities, and other unclassified assets in the portfolio. Summary information may differ from the portfolio schedule included in the financial statements due to the inclusion of derivative securities, any interest accruals, the exclusion of as-of trades, if any, the use of different classifications of securities for presentation purposes, and rounding. Holdings and allocations may vary over time. Due to rounding, percentages may not equal 100%.


This table shows the fund’s top 10 holdings by percentage of the fund’s net assets as of 4/30/23. Short-term investments and derivatives, if any, are excluded. Holdings may vary over time.

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two U.S. regional banks as well as a Swiss government-engineered takeover of Credit Suisse by UBS. Despite ongoing issues, stocks posted gains in the final month of the period, as positive earnings reports emerged and investors watched economic data for signals about future economic growth.

How did the fund perform in this environment?

For the 12-month reporting period, the fund returned 2.46%, outperforming its benchmark, the Russell 3000 Index, which returned 1.50%. The fund also outperformed its Lipper peer group median for the period, which was 1.38%.

What were some stocks that helped fund performance relative to the benchmark during the period?

Among the top contributors for the period was PulteGroup, one of the largest home construction companies in the United States. In January, the company reported first-quarter earnings and revenues that exceeded expectations. It also announced plans to increase new home building in 2023 in anticipation of increased demand.

Arch Capital Group, a specialty insurance company, was also a performance highlight. Helped in part by rising interest rates, the company’s net income soared for the first quarter of 2023. Arch Capital’s earnings have exceeded estimates for the past four quarters.

What were some holdings that detracted from performance during the period?

Retailer Target was among the top detractors for the period. Target struggled with excess inventory and a slowdown in discretionary spending, due in part to high inflation and concerns about a potential recession.

Southwest Airlines was also a detractor from performance for the period. The airline experienced significant service problems during the 2022 winter holiday season, resulting in weak bookings in January and February as well as a first-quarter loss for the company. However, we believe that Southwest has shown signs of a rebound, reporting strong bookings in March that resulted in solid revenue growth.

What is your outlook for the months ahead?

The challenging market conditions of the past 12 months have resulted in fairly negative investor sentiment. While we may be seeing some relief in terms of inflation and interest-rate hikes, they could continue to dampen economic growth and keep stock market performance choppy in the near term. Nonetheless, growth stock valuations have normalized, in our view, and we’ve been able to take advantage of the market weakness to invest in growth stocks at attractive prices.

We believe the fund will continue to benefit from our “go anywhere” core approach, which allows us to invest in both growth and value stocks. Regardless of the market environment, we remain focused on our disciplined investment process and the long-term potential of the companies in which we invest.

Thank you both for your time and insights today.

The views expressed in this report are exclusively those of Putnam Management and are subject to change. They are not meant as investment advice.

Please note that the holdings discussed in this report may not have been held by the fund for the entire period. Portfolio composition is subject to review in accordance with the fund’s investment strategy and may vary in the future. Current and future portfolio holdings are subject to risk.

Core Equity Fund 5 

 

 

Your fund’s performance

This section shows your fund’s performance, price, and distribution information for periods ended April 30, 2023, the end of its most recent fiscal year. In accordance with regulatory requirements for mutual funds, we also include performance as of the most recent calendar quarter-end and expense information taken from the fund’s current prospectus. Performance should always be considered in light of a fund’s investment strategy. Data represent past performance. Past performance does not guarantee future results. More recent returns may be less or more than those shown. Investment return and principal value will fluctuate, and you may have a gain or a loss when you sell your shares. Performance information does not reflect any deduction for taxes a shareholder may owe on fund distributions or on the redemption of fund shares. For the most recent month-end performance, please visit the Individual Investors section at putnam.com or call Putnam at 1-800-225-1581. Class R, R6, and Y shares are not available to all investors.

Annualized fund performance Total return for periods ended 4/30/23

  Life of fund  10 years  5 years  3 years  1 year 
Class A (9/24/10)           
Before sales charge  13.82%  12.49%  11.30%  16.90%  2.46% 
After sales charge  13.28  11.83  9.99  14.62  –3.43 
Class B (9/24/10)           
Before CDSC  13.28  11.82  10.46  16.01  1.69 
After CDSC  13.28  11.82  10.19  15.26  –3.15 
Class C (9/24/10)           
Before CDSC  13.28  11.82  10.46  16.02  1.69 
After CDSC  13.28  11.82  10.46  16.02  0.73 
Class R (9/24/10)           
Net asset value  13.53  12.21  11.01  16.60  2.19 
Class R6 (5/22/18)           
Net asset value  14.14  12.83  11.68  17.30  2.81 
Class Y (9/24/10)           
Net asset value  14.10  12.78  11.58  17.20  2.72 

 

Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. After-sales-charge returns for class A shares reflect the deduction of the maximum 5.75% sales charge levied at the time of purchase. Class B share returns after contingent deferred sales charge (CDSC) reflect the applicable CDSC, which is 5% in the first year, declining over time to 1% in the sixth year, and is eliminated thereafter. Class C share returns after CDSC reflect a 1% CDSC for the first year that is eliminated thereafter. Class R, R6, and Y shares have no initial sales charge or CDSC. Performance for class R6 shares prior to their inception is derived from the historical performance of class Y shares and has not been adjusted for the lower investor servicing fees applicable to class R6 shares; had it, returns would have been higher.

For a portion of the periods, the fund had expense limitations, without which returns would have been lower.

Class B and C share performance reflects conversion to class A shares after eight years.

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Comparative annualized index returns For periods ended 4/30/23

  Life of fund  10 years  5 years  3 years  1 year 
Russell 3000 Index  12.58%  11.67%  10.60%  14.07%  1.50% 
Lipper Multi-Cap Core Funds           
category median*  10.96  10.23  9.04  13.29  1.38 

 

Index and Lipper results should be compared with fund performance before sales charge, before CDSC, or at net asset value.

Lipper peer group median is provided by Lipper, a Refinitiv company.

* Over the 1-year, 3-year, 5-year, 10-year, and life-of-fund periods ended 4/30/23, there were 666, 592, 541, 372, and 304 funds, respectively, in this Lipper category.


Past performance does not indicate future results. At the end of the same time period, a $10,000 investment in the fund’s class B and C shares would have been valued at $30,568 and $30,550, respectively, and no contingent deferred sales charges would apply. A $10,000 investment in the fund’s class R, R6, and Y shares would have been valued at $31,644, $33,447, and $33,289, respectively.

Fund price and distribution information For the 12-month period ended 4/30/23

Distributions  Class A  Class B  Class C  Class R  Class R6  Class Y 
Number  1  1  1  1  1  1 
Income  $0.008000  —  —  —  $0.120000  $0.091000 
Capital gains               
Long-term gains  1.245365  $1.245365  $1.245365  $1.245365  1.245365  1.245365 
Short-term gains  0.168635  0.168635  0.168635  0.168635  0.168635  0.168635 
Total  $1.422000  $1.414000  $1.414000  $1.414000  $1.534000  $1.505000 
  Before  After  Net  Net  Net  Net  Net 
  sales  sales  asset  asset  asset  asset  asset 
Share value  charge  charge  value  value  value  value  value 
4/30/22  $31.57  $33.50  $30.36  $30.29  $31.35  $31.86  $31.83 
4/30/23  30.84  32.72  29.38  29.31  30.54  31.13  31.10 

 

The classification of distributions, if any, is an estimate. Before-sales-charge share value and current dividend rate for class A shares, if applicable, do not take into account any sales charge levied at the time of purchase. After-sales-charge share value, current dividend rate, and current 30-day SEC yield, if applicable, are calculated assuming that the maximum sales charge (5.75% for class A shares) was levied at the time of purchase. Final distribution information will appear on your year-end tax forms.

Core Equity Fund 7 

 

 

Annualized fund performance as of most recent calendar quarter
Total return for periods ended 3/31/23

  Life of fund  10 years  5 years  3 years  1 year 
Class A (9/24/10)           
Before sales charge  13.73%  12.48%  10.85%  21.04%  –7.40% 
After sales charge  13.19  11.81  9.54  18.67  –12.73 
Class B (9/24/10)           
Before CDSC  13.18  11.81  10.03  20.13  –8.09 
After CDSC  13.18  11.81  9.76  19.44  –12.46 
Class C (9/24/10)           
Before CDSC  13.19  11.80  10.03  20.13  –8.11 
After CDSC  13.19  11.80  10.03  20.13  –8.99 
Class R (9/24/10)           
Net asset value  13.45  12.20  10.57  20.72  –7.66 
Class R6 (5/22/18)           
Net asset value  14.06  12.82  11.24  21.46  –7.08 
Class Y (9/24/10)           
Net asset value  14.01  12.76  11.13  21.34  –7.18 

 

See the discussion following the fund performance table on page 6 for information about the calculation of fund performance.

Your fund’s expenses

As a mutual fund investor, you pay ongoing expenses, such as management fees, distribution fees (12b-1 fees), and other expenses. Using the following information, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You may also pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial representative.

Expense ratios

  Class A  Class B  Class C  Class R  Class R6  Class Y 
Total annual operating expenses for the             
fiscal year ended 4/30/22  0.96%  1.71%  1.71%  1.21%  0.62%  0.71% 
Annualized expense ratio for the             
six-month period ended 4/30/23*  0.99%  1.74%  1.74%  1.24%  0.64%  0.74% 

 

Fiscal year expense information in this table is taken from the most recent prospectus, is subject to change, and may differ from that shown for the annualized expense ratio and in the financial highlights of this report.

Expenses are shown as a percentage of average net assets.

* Expense ratios for each class are for the fund’s most recent fiscal half year. As a result of this, ratios may differ from expense ratios based on one-year data in the financial highlights.

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Expenses per $1,000

The following table shows the expenses you would have paid on a $1,000 investment in each class of the fund from 11/1/22 to 4/30/23. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

  Class A  Class B  Class C  Class R  Class R6  Class Y 
Expenses paid per $1,000*†  $5.11  $8.96  $8.96  $6.39  $3.31  $3.82 
Ending value (after expenses)  $1,081.10  $1,077.20  $1,077.40  $1,079.70  $1,083.20  $1,082.60 

 

* Expenses for each share class are calculated using the fund’s annualized expense ratio for each class, which represents the ongoing expenses as a percentage of average net assets for the six months ended 4/30/23. The expense ratio may differ for each share class.

† Expenses are calculated by multiplying the expense ratio by the average account value for the period; then multiplying the result by the number of days in the period (181); and then dividing that result by the number of days in the year (365).

Estimate the expenses you paid

To estimate the ongoing expenses you paid for the six months ended 4/30/23, use the following calculation method. To find the value of your investment on 11/1/22, call Putnam at 1-800-225-1581.


Compare expenses using the SEC’s method

The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the following table shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total costs) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.

  Class A  Class B  Class C  Class R  Class R6  Class Y 
Expenses paid per $1,000*†  $4.96  $8.70  $8.70  $6.21  $3.21  $3.71 
Ending value (after expenses)  $1,019.89  $1,016.17  $1,016.17  $1,018.65  $1,021.62  $1,021.12 

 

* Expenses for each share class are calculated using the fund’s annualized expense ratio for each class, which represents the ongoing expenses as a percentage of average net assets for the six months ended 4/30/23. The expense ratio may differ for each share class.

† Expenses are calculated by multiplying the expense ratio by the average account value for the six-month period; then multiplying the result by the number of days in the six-month period (181); and then dividing that result by the number of days in the year (365).

Core Equity Fund 9 

 

 

Comparative index definitions

Bloomberg U.S. Aggregate Bond Index is an unmanaged index of U.S. investment-grade fixed income securities.

ICE BofA (Intercontinental Exchange Bank of America) U.S. 3-Month Treasury Bill Index is an unmanaged index that seeks to measure the performance of U.S. Treasury bills available in the marketplace.

Russell 3000® Index is an unmanaged index of the 3,000 largest U.S. companies.

S&P 500® Index is an unmanaged index of common stock performance.

Indexes assume reinvestment of all distributions and do not account for fees. Securities and performance of a fund and an index will differ. You cannot invest directly in an index.

BLOOMBERG®  is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively “Bloomberg”). Bloomberg or Bloomberg’s licensors own all proprietary rights in the Bloomberg Indices. Neither Bloomberg nor Bloomberg’s licensors approve or endorse this material, or guarantee the accuracy or completeness of any information herein, or make any warranty, express or implied, as to the results to be obtained therefrom, and to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.

Frank Russell Company is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company.

ICE Data Indices, LLC (“ICE BofA”), used with permission. ICE BofA permits use of the ICE BofA indices and related data on an “as is” basis; makes no warranties regarding same; does not guarantee the suitability, quality, accuracy, timeliness, and/or completeness of the ICE BofA indices or any data included in, related to, or derived therefrom; assumes no liability in connection with the use of the foregoing; and does not sponsor, endorse, or recommend Putnam Investments, or any of its products or services.

Lipper, a Refinitiv company, is a third-party industry-ranking entity that ranks mutual funds. Its rankings do not reflect sales charges. Lipper rankings are based on total return at net asset value relative to other funds that have similar current investment styles or objectives as determined by Lipper. Lipper may change a fund’s category assignment at its discretion. Lipper category medians reflect performance trends for funds within a category.

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Other information for shareholders

Important notice regarding delivery of shareholder documents

In accordance with Securities and Exchange Commission (SEC) regulations, Putnam sends a single notice of internet availability, or a single printed copy, of annual and semiannual shareholder reports, prospectuses, and proxy statements to Putnam shareholders who share the same address, unless a shareholder requests otherwise. If you prefer to receive your own copy of these documents, please call Putnam at 1-800-225-1581 or, for exchange-traded funds only, 1-833-228-5577. We will begin sending individual copies within 30 days.

Proxy voting

Putnam is committed to managing our funds in the best interests of our shareholders. The Putnam funds’ proxy voting guidelines and procedures, as well as information regarding how your fund voted proxies relating to portfolio securities during the 12-month period ended June 30, 2022, are available in the Individual Investors section of putnam.com and on the SEC’s website, www.sec.gov. If you have questions about finding forms on the SEC’s website, you may call the SEC at 1-800-SEC-0330. You may also obtain the Putnam funds’ proxy voting guidelines and procedures at no charge by calling Putnam’s Shareholder Services at 1-800-225-1581 or, for exchange-traded funds only, 1-833-228-5577.

Fund portfolio holdings

The fund will file a complete schedule of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT within 60 days of the end of such fiscal quarter. Shareholders may obtain the fund’s Form N-PORT on the SEC’s website at www.sec.gov.

Trustee and employee fund ownership

Putnam employees and members of the Board of Trustees place their faith, confidence, and, most importantly, investment dollars in Putnam funds. As of April 30, 2023, Putnam employees had approximately $467,000,000 and the Trustees had approximately $66,000,000 invested in Putnam funds. These amounts include investments by the Trustees’ and employees’ immediate family members as well as investments through retirement and deferred compensation plans.

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Important notice regarding Putnam’s privacy policy

In order to conduct business with our shareholders, we must obtain certain personal information such as account holders’ names, addresses, Social Security numbers, and dates of birth. Using this information, we are able to maintain accurate records of accounts and transactions.

It is our policy to protect the confidentiality of our shareholder information, whether or not a shareholder currently owns shares of our funds. In particular, it is our policy not to sell information about you or your accounts to outside marketing firms. We have safeguards in place designed to prevent unauthorized access to our computer systems and procedures to protect personal information from unauthorized use.

Under certain circumstances, we must share account information with outside vendors who provide services to us, such as mailings and proxy solicitations. In these cases, the service providers enter into confidentiality agreements with us, and we provide only the information necessary to process transactions and perform other services related to your account. Finally, it is our policy to share account information with your financial representative, if you’ve listed one on your Putnam account.

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Audited financial statements

These sections of the report, as well as the accompanying Notes, preceded by the Report of Independent Registered Public Accounting Firm, constitute the fund’s audited financial statements.

The fund’s portfolio lists all the fund’s investments and their values as of the last day of the reporting period. Holdings are organized by asset type and industry sector, country, or state to show areas of concentration and diversification.

Statement of assets and liabilities shows how the fund’s net assets and share price are determined. All investment and non-investment assets are added together. Any unpaid expenses and other liabilities are subtracted from this total. The result is divided by the number of shares to determine the net asset value per share, which is calculated separately for each class of shares. (For funds with preferred shares, the amount subtracted from total assets includes the liquidation preference of preferred shares.)

Statement of operations shows the fund’s net investment gain or loss. This is done by first adding up all the fund’s earnings — from dividends and interest income — and subtracting its operating expenses to determine net investment income (or loss). Then, any net gain or loss the fund realized on the sales of its holdings — as well as any unrealized gains or losses over the period — is added to or subtracted from the net investment result to determine the fund’s net gain or loss for the fiscal period.

Statement of changes in net assets shows how the fund’s net assets were affected by the fund’s net investment gain or loss, by distributions to shareholders, and by changes in the number of the fund’s shares. It lists distributions and their sources (net investment income or realized capital gains) over the current reporting period and the most recent fiscal year-end. The distributions listed here may not match the sources listed in the Statement of operations because the distributions are determined on a tax basis and may be paid in a different period from the one in which they were earned.

Financial highlights provide an overview of the fund’s investment results, per-share distributions, expense ratios, net investment income ratios, and portfolio turnover (not required for money market funds) in one summary table, reflecting the five most recent reporting periods. In a semiannual report, the highlights table also includes the current reporting period.

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Report of Independent Registered Public Accounting Firm

To the Board of Trustees of Putnam Funds Trust and Shareholders of
Putnam Core Equity Fund:

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the fund’s portfolio, of Putnam Core Equity Fund (one of the funds constituting Putnam Funds Trust, referred to hereafter as the “Fund”) as of April 30, 2023, the related statement of operations for the year ended April 30, 2023, the statement of changes in net assets for each of the two years in the period ended April 30, 2023, including the related notes, and the financial highlights for each of the three years in the period ended April 30, 2023 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of April 30, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended April 30, 2023 and the financial highlights for each of the three years in the period ended April 30, 2023 in conformity with accounting principles generally accepted in the United States of America.

The financial statements of the Fund as of and for the year ended April 30, 2020 and the financial highlights for each of the periods ended on or prior to April 30, 2020 (not presented herein, other than the financial highlights) were audited by other auditors whose report dated June 8, 2020 expressed an unqualified opinion on those financial statements and financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of April 30, 2023 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
June 6, 2023

We have served as the auditor of one or more investment companies in the Putnam Investments family of funds since at least 1957. We have not been able to determine the specific year we began serving as auditor.

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The fund’s portfolio 4/30/23
COMMON STOCKS (91.8%)* Shares Value
Aerospace and defense (1.1%)
Northrop Grumman Corp. 41,532 $19,157,466
Raytheon Technologies Corp. 169,771 16,960,123
36,117,589
Air freight and logistics (0.2%)
GXO Logistics, Inc. † 132,129 7,020,014
7,020,014
Automobile components (0.3%)
Magna International, Inc. (Canada) S 178,732 9,322,661
9,322,661
Automobiles (0.8%)
General Motors Co. 218,407 7,216,167
Tesla, Inc. † 106,178 17,446,107
24,662,274
Banks (2.2%)
Bank of America Corp. 2,375,748 69,561,901
69,561,901
Beverages (2.2%)
Coca-Cola Co. (The) 782,589 50,203,084
Molson Coors Beverage Co. Class B 322,452 19,179,445
69,382,529
Biotechnology (2.5%)
AbbVie, Inc. 180,403 27,262,501
Amgen, Inc. 118,438 28,394,326
Regeneron Pharmaceuticals, Inc. † 30,404 24,377,623
80,034,450
Broadline retail (2.5%)
Amazon.com, Inc. † 758,960 80,032,332
80,032,332
Capital markets (3.9%)
Ameriprise Financial, Inc. 109,158 33,306,289
Goldman Sachs Group, Inc. (The) 105,742 36,316,032
Morgan Stanley 190,008 17,095,020
Raymond James Financial, Inc. 354,010 32,048,525
TPG, Inc. S 166,769 4,831,298
123,597,164
Chemicals (0.8%)
DuPont de Nemours, Inc. 98,623 6,875,996
Eastman Chemical Co. 223,354 18,822,042
25,698,038
Commercial services and supplies (0.3%)
Cintas Corp. 23,869 10,878,774
10,878,774
Communications equipment (1.1%)
Cisco Systems, Inc./Delaware 747,134 35,302,082
35,302,082


Core Equity Fund 15


COMMON STOCKS (91.8%)* cont. Shares Value
Consumer staples distribution and retail (2.6%)
Kroger Co. (The) 260,020 $12,644,773
Target Corp. 186,881 29,480,478
Walmart, Inc. 278,535 42,050,429
84,175,680
Containers and packaging (0.3%)
Berry Global Group, Inc. 169,121 9,776,885
9,776,885
Distributors (0.5%)
LKQ Corp. 258,420 14,918,587
14,918,587
Diversified REITs (0.3%)
Armada Hoffler Properties, Inc. R 970,846 11,378,315
11,378,315
Diversified telecommunication services (0.6%)
Liberty Global PLC Class A (United Kingdom) † 925,811 18,062,573
18,062,573
Electric utilities (2.4%)
Constellation Energy Corp. S 270,706 20,952,644
NRG Energy, Inc. 602,831 20,598,735
PG&E Corp. † 2,115,848 36,202,159
77,753,538
Electrical equipment (—%)
FREYR Battery SA (Norway) † S 156,925 1,109,460
1,109,460
Energy equipment and services (0.1%)
Atlas Energy Solutions, Inc. Class A † 90,065 1,624,773
1,624,773
Entertainment (1.1%)
Universal Music Group NV (Netherlands) 466,254 10,198,965
Walt Disney Co. (The) † 172,622 17,693,755
Warner Bros Discovery, Inc. † 444,788 6,053,565
33,946,285
Financial services (5.0%)
Apollo Global Management, Inc. 447,197 28,347,818
Berkshire Hathaway, Inc. Class B † 204,279 67,115,865
Mastercard, Inc. Class A 172,241 65,456,747
160,920,430
Ground transportation (1.4%)
Hertz Global Holdings, Inc. † 307,756 5,133,370
Union Pacific Corp. 194,794 38,121,186
43,254,556
Health care equipment and supplies (0.5%)
Medtronic PLC 162,623 14,790,562
Nyxoah SA (Belgium) † 183,630 1,483,730
16,274,292
Health care providers and services (5.2%)
CVS Health Corp. 229,963 16,858,588
Elevance Health, Inc. 45,153 21,160,953
HCA Healthcare, Inc. 54,691 15,714,365


16 Core Equity Fund


COMMON STOCKS (91.8%)* cont. Shares Value
Health care providers and services cont.
McKesson Corp. 108,079 $39,366,695
Tenet Healthcare Corp. † 167,120 12,253,238
UnitedHealth Group, Inc. 125,444 61,729,738
167,083,577
Hotels, restaurants, and leisure (1.2%)
Booking Holdings, Inc. † 3,750 10,073,663
Chuy’s Holdings, Inc. † 277,265 9,671,003
McDonald’s Corp. 67,010 19,818,208
39,562,874
Household durables (1.5%)
PulteGroup, Inc. 736,013 49,423,273
49,423,273
Household products (1.1%)
Procter & Gamble Co. (The) 221,192 34,590,005
34,590,005
Industrial conglomerates (1.0%)
Honeywell International, Inc. 162,839 32,541,746
32,541,746
Insurance (1.3%)
Arch Capital Group, Ltd. † 315,661 23,696,671
Assured Guaranty, Ltd. 315,850 17,014,840
40,711,511
Interactive media and services (5.4%)
Alphabet, Inc. Class C † 1,066,269 115,391,631
Meta Platforms, Inc. Class A † 233,572 56,132,023
171,523,654
IT Services (0.8%)
Gartner, Inc. † 66,512 20,117,220
GoDaddy, Inc. Class A † 61,783 4,675,737
24,792,957
Machinery (2.0%)
Deere & Co. 36,962 13,972,375
Otis Worldwide Corp. 590,263 50,349,434
64,321,809
Media (0.6%)
Comcast Corp. Class A 439,822 18,195,436
18,195,436
Metals and mining (1.5%)
Freeport-McMoRan, Inc. (Indonesia) 587,823 22,284,370
Nucor Corp. 163,883 24,284,183
46,568,553
Mortgage real estate investment trusts (REITs) (0.2%)
Starwood Property Trust, Inc. R S 418,815 7,492,600
7,492,600
Multi-utilities (0.5%)
CMS Energy Corp. 266,918 16,618,315
16,618,315


Core Equity Fund 17


COMMON STOCKS (91.8%)* cont. Shares Value
Office REITs (0.5%)
Equity Commonwealth R 496,470 $10,286,858
Highwoods Properties, Inc. R 207,629 4,758,857
15,045,715
Oil, gas, and consumable fuels (2.6%)
Antero Resources Corp. † 140,676 3,234,141
ConocoPhillips 328,357 33,784,652
Exxon Mobil Corp. 283,522 33,551,993
Phillips 66 140,915 13,950,585
84,521,371
Passenger airlines (0.7%)
Southwest Airlines Co. 704,206 21,330,400
21,330,400
Pharmaceuticals (4.5%)
Eli Lilly and Co. 113,298 44,850,146
Johnson & Johnson 292,109 47,818,243
Merck & Co., Inc. 272,115 31,421,119
Pfizer, Inc. 471,339 18,330,374
142,419,882
Real estate management and development (1.1%)
CBRE Group, Inc. Class A † 469,124 35,963,046
35,963,046
Semiconductors and semiconductor equipment (4.0%)
Intel Corp. 205,654 6,387,613
Lam Research Corp. 67,204 35,220,272
NVIDIA Corp. 181,279 50,303,110
Qualcomm, Inc. 150,664 17,597,555
Texas Instruments, Inc. 110,128 18,413,402
127,921,952
Software (10.8%)
Adobe, Inc. † 51,617 19,488,515
Fair Isaac Corp. † 8,800 6,405,960
Microsoft Corp. 783,987 240,887,846
NCR Corp. † 380,422 8,479,606
Oracle Corp. 563,502 53,374,909
Salesforce, Inc. † 86,013 17,062,399
345,699,235
Specialized REITs (1.2%)
Gaming and Leisure Properties, Inc. R 718,558 37,365,016
37,365,016
Specialty retail (1.9%)
Best Buy Co., Inc. 256,037 19,079,877
Lowe’s Cos., Inc. 193,442 40,203,051
59,282,928
Technology hardware, storage, and peripherals (7.7%)
Apple, Inc. 1,445,198 245,221,197
245,221,197
Textiles, apparel, and luxury goods (0.2%)
Nike, Inc. Class B 62,754 7,952,187
7,952,187


18 Core Equity Fund



COMMON STOCKS (91.8%)* cont. Shares Value
Tobacco (0.7%)
Altria Group, Inc. 481,882 $22,894,214
22,894,214
Trading companies and distributors (0.9%)
Karat Packaging, Inc. 206,804 2,804,262
United Rentals, Inc. 74,223 26,802,667
29,606,929
Total common stocks (cost $1,768,881,218) $2,933,455,564

INVESTMENT COMPANIES (1.4%)* Shares Value
iShares Expanded Tech-Software Sector ETF S 155,933 $46,234,135
Total investment companies (cost $43,516,473) $46,234,135

SHORT-TERM INVESTMENTS (8.2%)* Principal amount/
shares		 Value
Interest in $423,210,000 joint tri-party repurchase agreement dated 4/28/2023 with Citigroup Global Markets, Inc. due 5/1/2023 — maturity value of $40,560,218 for an effective yield of 4.800% (collateralized by Agency Mortgage-Backed Securities and U.S. Treasuries (including strips) with coupon rates ranging from 1.375% to 6.500% and due dates ranging from 6/30/2023 to 10/1/2052, valued at $431,698,605) $40,544,000 $40,544,000
Putnam Cash Collateral Pool, LLC 5.06% d Shares 49,476,543 49,476,543
Putnam Short Term Investment Fund Class P 4.98% L Shares 160,596,581 160,596,581
U.S. Treasury Bills 4.790%, 5/11/23 # $1,700,000 1,698,028
U.S. Treasury Bills 4.738%, 5/2/23 # 4,700,000 4,699,458
U.S. Treasury Bills 4.607%, 5/23/23 # 3,400,000 3,391,352
U.S. Treasury Bills 4.240%, 5/18/23 # 1,500,000 1,496,920
Total short-term investments (cost $261,901,994) $261,902,882

TOTAL INVESTMENTS
Total investments (cost $2,074,299,685) $3,241,592,581

Key to holding’s abbreviations
ETF Exchange Traded Fund
Notes to the fund’s portfolio
Unless noted otherwise, the notes to the fund’s portfolio are for the close of the fund’s reporting period, which ran from May 1, 2022 through April 30, 2023 (the reporting period). Within the following notes to the portfolio, references to “Putnam Management” represent Putnam Investment Management, LLC, the fund’s manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC and references to “ASC 820” represent Accounting Standards Codification 820 Fair Value Measurements and Disclosures.
* Percentages indicated are based on net assets of $3,194,655,360.
† This security is non-income-producing.
# This security, in part or in entirety, was pledged and segregated with the broker to cover margin requirements for futures contracts at the close of the reporting period. Collateral at period end totaled $11,147,857 and is included in Investments in securities on the Statement of assets and liabilities (Notes 1 and 8).
d Affiliated company. See Notes 1 and 5 to the financial statements regarding securities lending. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.
L Affiliated company (Note 5). The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.
R Real Estate Investment Trust.


Core Equity Fund 19



S Security on loan, in part or in entirety, at the close of the reporting period (Note 1).
Unless otherwise noted, the rates quoted in Short-term investments security descriptions represent the weighted average yield to maturity.
The dates shown on debt obligations are the original maturity dates.

FUTURES CONTRACTS OUTSTANDING at 4/30/23
Number of
contracts		 Notional
amount		 Value Expiration
date		 Unrealized
appreciation/
(depreciation)
Russell 2000 Index E-Mini (Long) 949 $83,938,433 $84,214,260 Jun-23 $(431,262)
S&P 500 Index E-Mini (Long) 404 84,223,496 84,607,700 Jun-23 5,449,720
Unrealized appreciation 5,449,720
Unrealized (depreciation) (431,262)
Total $5,018,458
ASC 820 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows:

Level 1: Valuations based on quoted prices for identical securities in active markets.

Level 2: Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3: Valuations based on inputs that are unobservable and significant to the fair value measurement.

The following is a summary of the inputs used to value the fund’s net assets as of the close of the reporting period:

Valuation inputs
Investments in securities: Level 1 Level 2 Level 3
Common stocks*:
Communication services $231,528,983 $10,198,965 $—
Consumer discretionary 285,157,116 — —
Consumer staples 211,042,428 — —
Energy 86,146,144 — —
Financials 402,283,606 — —
Health care 405,812,201 — —
Industrials 246,181,277 — —
Information technology 778,937,423 — —
Materials 82,043,476 — —
Real estate 99,752,092 — —
Utilities 94,371,853 — —
Total common stocks 2,923,256,599 10,198,965 —
Investment companies 46,234,135 — —
Short-term investments — 261,902,882 —
Totals by level $2,969,490,734 $272,101,847 $—
Valuation inputs
Other financial instruments: Level 1 Level 2 Level 3
Futures contracts $5,018,458 $— $—
Totals by level $5,018,458 $— $—
* Common stock classifications are presented at the sector level, which may differ from the fund’s portfolio presentation.
At the start and close of the reporting period, Level 3 investments in securities represented less than 1% of the fund’s net assets and were not considered a significant portion of the fund’s portfolio.


The accompanying notes are an integral part of these financial statements.


20 Core Equity Fund


Statement of assets and liabilities 4/30/23

ASSETS   
Investment in securities, at value, including $48,741,839 of securities on loan (Note 1):   
Unaffiliated issuers (identified cost $1,864,226,561)  $3,031,519,457 
Affiliated issuers (identified cost $210,073,124) (Note 5)  210,073,124 
Foreign currency (cost $931) (Note 1)  930 
Dividends, interest and other receivables  5,235,724 
Receivable for shares of the fund sold  1,667,047 
Receivable for investments sold  13,642,615 
Receivable for variation margin on futures contracts (Note 1)  1,399,501 
Prepaid assets  109,566 
Total assets  3,263,647,964 
 
LIABILITIES   
Payable to custodian  2,622,271 
Payable for investments purchased  11,291,692 
Payable for shares of the fund repurchased  1,950,277 
Payable for compensation of Manager (Note 2)  1,480,150 
Payable for custodian fees (Note 2)  20,160 
Payable for investor servicing fees (Note 2)  734,233 
Payable for Trustee compensation and expenses (Note 2)  569,326 
Payable for administrative services (Note 2)  17,239 
Payable for distribution fees (Note 2)  537,856 
Collateral on securities loaned, at value (Note 1)  49,476,543 
Other accrued expenses  292,857 
Total liabilities  68,992,604 
 
Net assets  $3,194,655,360 
 
REPRESENTED BY   
Paid-in capital (Unlimited shares authorized) (Notes 1 and 4)  $1,941,400,041 
Total distributable earnings (Note 1)  1,253,255,319 
Total — Representing net assets applicable to capital shares outstanding  $3,194,655,360 
 
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE   
Net asset value and redemption price per class A share   
($2,176,483,801 divided by 70,584,333 shares)  $30.84 
Offering price per class A share (100/94.25 of $30.84)*  $32.72 
Net asset value and offering price per class B share ($10,454,974 divided by 355,844 shares)**  $29.38 
Net asset value and offering price per class C share ($104,750,571 divided by 3,574,301 shares)**  $29.31 
Net asset value, offering price and redemption price per class R share   
($6,651,357 divided by 217,763 shares)  $30.54 
Net asset value, offering price and redemption price per class R6 share   
($69,099,323 divided by 2,219,942 shares)  $31.13 
Net asset value, offering price and redemption price per class Y share   
($827,215,334 divided by 26,601,284 shares)  $31.10 

 

*On single retail sales of less than $50,000. On sales of $50,000 or more the offering price is reduced.

**Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

The accompanying notes are an integral part of these financial statements.

Core Equity Fund 21 

 

 

Statement of operations Year ended 4/30/23

INVESTMENT INCOME   
Dividends (net of foreign tax of $114,016)  $50,116,736 
Interest (including interest income of $4,804,329 from investments in affiliated issuers) (Note 5)  5,388,231 
Securities lending (net of expenses) (Notes 1 and 5)  237,766 
Total investment income  55,742,733 
 
EXPENSES   
Compensation of Manager (Note 2)  16,818,325 
Investor servicing fees (Note 2)  4,381,181 
Custodian fees (Note 2)  34,784 
Trustee compensation and expenses (Note 2)  129,095 
Distribution fees (Note 2)  6,540,004 
Administrative services (Note 2)  102,810 
Other  816,469 
Total expenses  28,822,668 
Expense reduction (Note 2)  (20,126) 
Net expenses  28,802,542 
 
Net investment income  26,940,191 
 
REALIZED AND UNREALIZED GAIN (LOSS)   
Net realized gain (loss) on:   
Securities from unaffiliated issuers (Notes 1 and 3)  63,740,653 
Foreign currency transactions (Note 1)  (6,467) 
Futures contracts (Note 1)  (15,117,176) 
Written options (Note 1)  (267,590) 
Total net realized gain  48,349,420 
Change in net unrealized appreciation (depreciation) on:   
Securities from unaffiliated issuers  (12,617,055) 
Assets and liabilities in foreign currencies  12 
Futures contracts  8,137,682 
Total change in net unrealized depreciation  (4,479,361) 
 
Net gain on investments  43,870,059 
 
Net increase in net assets resulting from operations  $70,810,250 

 

The accompanying notes are an integral part of these financial statements.

22 Core Equity Fund 

 

 

Statement of changes in net assets

INCREASE (DECREASE) IN NET ASSETS  Year ended 4/30/23  Year ended 4/30/22 
Operations     
Net investment income  $26,940,191  $14,627,865 
Net realized gain on investments     
and foreign currency transactions  48,349,420  193,174,802 
Change in net unrealized depreciation of investments     
and assets and liabilities in foreign currencies  (4,479,361)  (247,639,288) 
Net increase (decrease) in net assets resulting     
from operations  70,810,250  (39,836,621) 
Distributions to shareholders (Note 1):     
From ordinary income     
Net investment income     
Class A  (547,114)  (17,097,723) 
Class R  —  (29,512) 
Class R6  (256,846)  (648,567) 
Class Y  (2,240,309)  (7,427,175) 
Net realized short-term gain on investments     
Class A  (11,567,091)  (97,387,203) 
Class B  (80,094)  (1,113,573) 
Class C  (631,117)  (6,606,685) 
Class R  (33,416)  (202,347) 
Class R6  (360,943)  (2,521,070) 
Class Y  (4,151,080)  (31,072,447) 
From net realized long-term gain on investments     
Class A  (85,422,917)  (96,795,384) 
Class B  (591,498)  (1,106,806) 
Class C  (4,660,801)  (6,566,536) 
Class R  (246,771)  (201,117) 
Class R6  (2,665,562)  (2,505,750) 
Class Y  (30,655,710)  (30,883,621) 
Increase from capital share transactions (Note 4)  44,648,377  350,783,645 
Total increase (decrease) in net assets  (28,652,642)  8,781,508 
 
NET ASSETS     
Beginning of year  3,223,308,002  3,214,526,494 
End of year  $3,194,655,360  $3,223,308,002 

 

The accompanying notes are an integral part of these financial statements.

Core Equity Fund 23 

 

 

Financial highlights
(For a common share outstanding throughout the period)

  INVESTMENT OPERATIONS  LESS DISTRIBUTIONS  RATIOS AND SUPPLEMENTAL DATA 
                        Ratio of net   
  Net asset    Net realized                Ratio  investment   
  value,    and unrealized  Total from  From net  From    Net asset  Total return  Net assets,  of expenses  income (loss)  Portfolio 
  beginning  Net investment  gain (loss)  investment  investment  net realized gain  Total  value, end  at net asset  end of period  to average  to average  turnover 
Period ended­  of period­  income (loss)a  on investments­  operations­  income­  on investments­  distributions  of period­  value (%)b  (in thousands)  net assets (%)c  net assets (%)  (%) 
Class A                           
April 30, 2023­  $31.57­  .25­  .44­  .69­  (.01)  (1.41)  (1.42)  $30.84­  2.46­  $2,176,484­  .98­  .84­  13­ 
April 30, 2022  34.95­  .14­  (.31)  (.17)  (.26)  (2.95)  (3.21)  31.57­  (1.21)  2,221,203­  .96­  .41­  23­ 
April 30, 2021  22.64­  .19­  12.78­  12.97­  (.26)  (.40)  (.66)  34.95­  57.85­  2,338,484­  .98­  .68­  46­ 
April 30, 2020  24.11­  .25­  (.54)  (.29)  (.21)  (.97)  (1.18)  22.64­  (1.62)  1,583,575­  1.00­  1.04­  26­ 
April 30, 2019  22.66­  .21­  1.73­  1.94­  —­  (.49)  (.49)  24.11­  8.66­  1,746,453­  1.03­d  .91­  41­ 
Class B                           
April 30, 2023­  $30.36­  .03­  .40­  .43­  —­  (1.41)  (1.41)  $29.38­  1.69­  $10,455­  1.73­  .10­  13­ 
April 30, 2022  33.73­  (.12)  (.30)  (.42)  —­  (2.95)  (2.95)  30.36­  (1.96)  20,462­  1.71­  (.34)  23­ 
April 30, 2021  21.87­  (.01)  12.31­  12.30­  (.04)  (.40)  (.44)  33.73­  56.61­  30,911­  1.73­  (.04)  46­ 
April 30, 2020  23.30­  .07­  (.52)  (.45)  (.01)  (.97)  (.98)  21.87­  (2.30)  27,496­  1.75­  .30­  26­ 
April 30, 2019  22.09­  .04­  1.66­  1.70­  —­  (.49)  (.49)  23.30­  7.79­  38,063­  1.78­d  .19­  41­ 
Class C                           
April 30, 2023­  $30.29­  .03­  .40­  .43­  —­  (1.41)  (1.41)  $29.31­  1.69­  $104,751­  1.73­  .09­  13­ 
April 30, 2022  33.65­  (.12)  (.29)  (.41)  —­  (2.95)  (2.95)  30.29­  (1.94)  131,616­  1.71­  (.34)  23­ 
April 30, 2021  21.83­  (.01)  12.28­  12.27­  (.05)  (.40)  (.45)  33.65­  56.59­  163,875­  1.73­  (.05)  46­ 
April 30, 2020  23.27­  .07­  (.52)  (.45)  (.02)  (.97)  (.99)  21.83­  (2.30)  136,476­  1.75­  .30­  26­ 
April 30, 2019  22.06­  .05­  1.65­  1.70­  —­  (.49)  (.49)  23.27­  7.80­  172,982­  1.78­d  .21­  41­ 
Class R                           
April 30, 2023­  $31.35­  .18­  .42­  .60­  —­  (1.41)  (1.41)  $30.54­  2.19­  $6,651­  1.23­  .60­  13­ 
April 30, 2022  34.77­  .06­  (.31)  (.25)  (.22)  (2.95)  (3.17)  31.35­  (1.46)  5,193­  1.21­  .16­  23­ 
April 30, 2021  22.50­  .13­  12.69­  12.82­  (.15)  (.40)  (.55)  34.77­  57.45­  3,796­  1.23­  .45­  46­ 
April 30, 2020  23.96­  .19­  (.55)  (.36)  (.13)  (.97)  (1.10)  22.50­  (1.89)  3,043­  1.25­  .80­  26­ 
April 30, 2019  22.58­  .16­  1.71­  1.87­  —­  (.49)  (.49)  23.96­  8.38­  4,395­  1.28­d  .69­  41­ 
Class R6                           
April 30, 2023­  $31.86­  .36­  .44­  .80­  (.12)  (1.41)  (1.53)  $31.13­  2.81­  $69,099­  .64­  1.19­  13­ 
April 30, 2022  35.24­  .27­  (.32)  (.05)  (.38)  (2.95)  (3.33)  31.86­  (.87)  66,451­  .62­  .75­  23­ 
April 30, 2021  22.82­  .29­  12.88­  13.17­  (.35)  (.40)  (.75)  35.24­  58.37­  51,886­  .63­  1.03­  46­ 
April 30, 2020  24.28­  .34­  (.53)  (.19)  (.30)  (.97)  (1.27)  22.82­  (1.23)  35,151­  .63­  1.40­  26­ 
April 30, 2019 †­  23.57­  .28­  .92­  1.20­  —­  (.49)  (.49)  24.28­  5.19 *  39,959­  .62*d  1.23*  41­ 
Class Y                           
April 30, 2023­  $31.83­  .33­  .44­  .77­  (.09)  (1.41)  (1.50)  $31.10­  2.72­  $827,215­  .73­  1.10­  13­ 
April 30, 2022  35.22­  .23­  (.32)  (.09)  (.35)  (2.95)  (3.30)  31.83­  (.98)  778,384­  .71­  .66­  23­ 
April 30, 2021  22.80­  .26­  12.88­  13.14­  (.32)  (.40)  (.72)  35.22­  58.26­  625,574­  .73­  .93­  46­ 
April 30, 2020  24.26­  .32­  (.54)  (.22)  (.27)  (.97)  (1.24)  22.80­  (1.35)  420,613­  .75­  1.30­  26­ 
April 30, 2019  22.75­  .28­  1.72­  2.00­  —­  (.49)  (.49)  24.26­  8.90­  548,746­  .78­d  1.20­  41­ 

 

See notes to financial highlights at the end of this section.

The accompanying notes are an integral part of these financial statements.

24 Core Equity Fund  Core Equity Fund 25 

 

 

Financial highlights cont.

* Not annualized.

† For the period May 22, 2018 (commencement of operations) to April 30, 2019.

a Per share net investment income has been determined on the basis of the weighted average number of shares outstanding during the period.

b Total return assumes dividend reinvestment and does not reflect the effect of sales charges.

c Includes amounts paid through expense offset and brokerage/service arrangements, if any (Note 2). Also excludes acquired fund fees and expenses, if any.

d Includes one-time merger costs of 0.01% as a percentage of average net assets.

The accompanying notes are an integral part of these financial statements.

26 Core Equity Fund 

 

 

Notes to financial statements 4/30/23

Within the following Notes to financial statements, references to “State Street” represent State Street Bank and Trust Company, references to “the SEC” represent the Securities and Exchange Commission, references to “Putnam Management” represent Putnam Investment Management, LLC, the fund’s manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC. Additionally, references to “OTC”, if any, represent over-the-counter. Unless otherwise noted, the “reporting period” represents the period from May 1, 2022 through April 30, 2023.

Putnam Core Equity Fund (the fund) is a diversified series of Putnam Funds Trust (the Trust), a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Prior to December 1, 2022, the name of the fund was Putnam Multi-Cap Core Fund. The goal of the fund is to seek capital appreciation. The fund invests mainly in common stocks (growth or value stocks or both) of U.S. companies of any size that Putnam Management believes have favorable investment potential. For example, the fund may purchase stocks of companies with stock prices that reflect a value lower than that which Putnam Management places on the company. Putnam Management may also consider other factors that it believes will cause the stock price to rise. Putnam Management may consider, among other factors, a company’s valuation, financial strength, growth potential, competitive position in its industry, projected future earnings, cash flows and dividends when deciding whether to buy or sell investments. Under normal circumstances, the fund invests at least 80% of the fund’s net assets (plus the amount of any borrowings for investment purposes) in equity investments, including common stocks, preferred stocks, convertible securities, warrants, American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs). This policy may be changed only after 60 days’ notice to shareholders.

The fund offers the following share classes. The expenses for each class of shares may differ based on the distribution and investor servicing fees of each class, which are identified in Note 2.

Share class  Sales charge  Contingent deferred sales charge  Conversion feature 
    1.00% on certain redemptions of shares   
Class A  Up to 5.75%  bought with no initial sales charge  None 
      Converts to class A shares 
Class B*  None  5.00% phased out over six years  after 8 years 
      Converts to class A shares 
Class C  None  1.00% eliminated after one year  after 8 years 
Class R†  None  None  None 
Class R6†  None  None  None 
Class Y†  None  None  None 

 

* Purchases of class B shares are closed to new and existing investors except by exchange from class B shares of another Putnam fund or through dividend and/or capital gains reinvestment.

† Not available to all investors.

In the normal course of business, the fund enters into contracts that may include agreements to indemnify another party under given circumstances. The fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be, but have not yet been, made against the fund. However, the fund’s management team expects the risk of material loss to be remote.

The fund has entered into contractual arrangements with an investment adviser, administrator, distributor, shareholder servicing agent and custodian, who each provide services to the fund. Unless expressly stated otherwise, shareholders are not parties to, or intended beneficiaries of these contractual arrangements, and these contractual arrangements are not intended to create any shareholder right to enforce them against the service providers or to seek any remedy under them against the service providers, either directly or on behalf of the fund.

Under the fund’s Amended and Restated Agreement and Declaration of Trust, any claims asserted against or on behalf of the Putnam Funds, including claims against Trustees and Officers, must be brought in state and federal courts located within the Commonwealth of Massachusetts.

Core Equity Fund 27 

 

 

Note 1: Significant accounting policies

The following is a summary of significant accounting policies consistently followed by the fund in the preparation of its financial statements. The preparation of financial statements is in conformity with accounting principles generally accepted in the United States of America and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations. Actual results could differ from those estimates. Subsequent events after the Statement of assets and liabilities date through the date that the financial statements were issued have been evaluated in the preparation of the financial statements.

Investment income, realized and unrealized gains and losses and expenses of the fund are borne pro-rata based on the relative net assets of each class to the total net assets of the fund, except that each class bears expenses unique to that class (including the distribution fees applicable to such classes). Each class votes as a class only with respect to its own distribution plan or other matters on which a class vote is required by law or determined by the Trustees. If the fund were liquidated, shares of each class would receive their pro-rata share of the net assets of the fund. In addition, the Trustees declare separate dividends on each class of shares.

Security valuation Portfolio securities and other investments are valued using policies and procedures adopted by the Board of Trustees. The Trustees have formed a Pricing Committee to oversee the implementation of these procedures and have delegated responsibility for valuing the fund’s assets in accordance with these procedures to Putnam Management. Putnam Management has established an internal Valuation Committee that is responsible for making fair value determinations, evaluating the effectiveness of the pricing policies of the fund and reporting to the Pricing Committee.

Investments for which market quotations are readily available are valued at the last reported sales price on their principal exchange, or official closing price for certain markets, and are classified as Level 1 securities under Accounting Standards Codification 820 Fair Value Measurements and Disclosures (ASC 820). If no sales are reported, as in the case of some securities that are traded OTC, a security is valued at its last reported bid price and is generally categorized as a Level 2 security.

Investments in open-end investment companies (excluding exchange-traded funds), if any, which can be classified as Level 1 or Level 2 securities, are valued based on their net asset value. The net asset value of such investment companies equals the total value of their assets less their liabilities and divided by the number of their outstanding shares.

Market quotations are not considered to be readily available for certain debt obligations (including short-term investments with remaining maturities of 60 days or less) and other investments; such investments are valued on the basis of valuations furnished by an independent pricing service approved by the Trustees or dealers selected by Putnam Management. Such services or dealers determine valuations for normal institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships, generally recognized by institutional traders, between securities (which consider such factors as security prices, yields, maturities and ratings). These securities will generally be categorized as Level 2.

Many securities markets and exchanges outside the U.S. close prior to the scheduled close of the New York Stock Exchange and therefore the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the scheduled close of the New York Stock Exchange. Accordingly, on certain days, the fund will fair value certain foreign equity securities taking into account multiple factors including movements in the U.S. securities markets, currency valuations and comparisons to the valuation of American Depository Receipts, exchange-traded funds and futures contracts. The foreign equity securities, which would generally be classified as Level 1 securities, will be transferred to Level 2 of the fair value hierarchy when they are valued at fair value. The number of days on which fair value prices will be used will depend on market activity and it is possible that fair value prices will be used by the fund to a significant extent. At the close of the reporting period, fair value pricing was used for certain foreign securities in the portfolio. Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate.

To the extent a pricing service or dealer is unable to value a security or provides a valuation that Putnam Management does not believe accurately reflects the security’s fair value, the security will be valued at fair value by Putnam Management in accordance with policies and procedures approved by the Trustees. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. These valuations consider such factors as significant market or specific security events such as interest rate or credit quality changes, various relationships with other securities, discount rates, U.S. Treasury, U.S. swap and credit yields, index levels, convexity exposures, recovery rates, sales and other

28 Core Equity Fund 

 

 

multiples and resale restrictions. These securities are classified as Level 2 or as Level 3 depending on the priority of the significant inputs.

To assess the continuing appropriateness of fair valuations, the Valuation Committee reviews and affirms the reasonableness of such valuations on a regular basis after considering all relevant information that is reasonably available. Such valuations and procedures are reviewed periodically by the Trustees. The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount.

Joint trading account Pursuant to an exemptive order from the SEC, the fund may transfer uninvested cash balances into a joint trading account along with the cash of other registered investment companies and certain other accounts managed by Putnam Management. These balances may be invested in issues of short-term investments having maturities of up to 90 days.

Repurchase agreements The fund, or any joint trading account, through its custodian, receives delivery of the underlying securities, the fair value of which at the time of purchase is required to be in an amount at least equal to the resale price, including accrued interest. Collateral for certain tri-party repurchase agreements, which totaled $41,357,218 at the end of the reporting period, is held at the counterparty’s custodian in a segregated account for the benefit of the fund and the counterparty. Putnam Management is responsible for determining that the value of these underlying securities is at all times at least equal to the resale price, including accrued interest. In the event of default or bankruptcy by the other party to the agreement, retention of the collateral may be subject to legal proceedings.

Security transactions and related investment income Security transactions are recorded on the trade date (the date the order to buy or sell is executed). Gains or losses on securities sold are determined on the identified cost basis.

Interest income, net of any applicable withholding taxes, if any, is recorded on the accrual basis. Amortization and accretion of premiums and discounts on debt securities, if any, is recorded on the accrual basis.

Dividend income, net of any applicable withholding taxes, is recognized on the ex-dividend date except that certain dividends from foreign securities, if any, are recognized as soon as the fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair value of the securities received. Dividends representing a return of capital or capital gains, if any, are reflected as a reduction of cost and/or as a realized gain.

Foreign currency translation The accounting records of the fund are maintained in U.S. dollars. The fair value of foreign securities, currency holdings, and other assets and liabilities is recorded in the books and records of the fund after translation to U.S. dollars based on the exchange rates on that day. The cost of each security is determined using historical exchange rates. Income and withholding taxes are translated at prevailing exchange rates when earned or incurred. The fund does not isolate that portion of realized or unrealized gains or losses resulting from changes in the foreign exchange rate on investments from fluctuations arising from changes in the market prices of the securities. Such gains and losses are included with the net realized and unrealized gain or loss on investments. Net realized gains and losses on foreign currency transactions represent net realized exchange gains or losses on disposition of foreign currencies, currency gains and losses realized between the trade and settlement dates on securities transactions and the difference between the amount of investment income and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized appreciation and depreciation of assets and liabilities in foreign currencies arise from changes in the value of assets and liabilities other than investments at the period end, resulting from changes in the exchange rate.

Options contracts The fund uses options contracts to manage downside risks.

The potential risk to the fund is that the change in value of options contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments if there is an illiquid secondary market for the contracts, if interest or exchange rates move unexpectedly or if the counterparty to the contract is unable to perform. Realized gains and losses on purchased options are included in realized gains and losses on investment securities. If a written call option is exercised, the premium originally received is recorded as an addition to sales proceeds. If a written put option is exercised, the premium originally received is recorded as a reduction to the cost of investments.

Core Equity Fund 29 

 

 

Exchange-traded options are valued at the last sale price or, if no sales are reported, the last bid price for purchased options and the last ask price for written options. OTC traded options are valued using prices supplied by dealers.

Options on swaps are similar to options on securities except that the premium paid or received is to buy or grant the right to enter into a previously agreed upon interest rate or credit default contract. Forward premium swap option contracts include premiums that have extended settlement dates. The delayed settlement of the premiums is factored into the daily valuation of the option contracts. In the case of interest rate cap and floor contracts, in return for a premium, ongoing payments between two parties are based on interest rates exceeding a specified rate, in the case of a cap contract, or falling below a specified rate in the case of a floor contract. Written option contracts outstanding at period end, if any, are listed after the fund’s portfolio.

Futures contracts The fund uses futures contracts to equitize cash.

The potential risk to the fund is that the change in value of futures contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments, if there is an illiquid secondary market for the contracts, if interest or exchange rates move unexpectedly or if the counterparty to the contract is unable to perform. With futures, there is minimal counterparty credit risk to the fund since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized on the Statement of assets and liabilities. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.

Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade. The fund and the broker agree to exchange an amount of cash equal to the daily fluctuation in the value of the futures contract. Such receipts or payments are known as “variation margin.”

Futures contracts outstanding at period end, if any, are listed after the fund’s portfolio.

Securities lending The fund may lend securities, through its agent, to qualified borrowers in order to earn additional income. The loans are collateralized by cash in an amount at least equal to the fair value of the securities loaned. The fair value of securities loaned is determined daily and any additional required collateral is allocated to the fund on the next business day. The remaining maturities of the securities lending transactions are considered overnight and continuous. The risk of borrower default will be borne by the fund’s agent; the fund will bear the risk of loss with respect to the investment of the cash collateral. Income from securities lending, net of expenses, is included in investment income on the Statement of operations. Cash collateral is invested in Putnam Cash Collateral Pool, LLC, a limited liability company managed by an affiliate of Putnam Management. Investments in Putnam Cash Collateral Pool, LLC are valued at its closing net asset value each business day. There are no management fees charged to Putnam Cash Collateral Pool, LLC. At the close of the reporting period, the fund received cash collateral of $49,476,543 and the value of securities loaned amounted to $48,741,839.

Interfund lending The fund, along with other Putnam funds, may participate in an interfund lending program pursuant to an exemptive order issued by the SEC. This program allows the fund to borrow from or lend to other Putnam funds that permit such transactions. Interfund lending transactions are subject to each fund’s investment policies and borrowing and lending limits. Interest earned or paid on the interfund lending transaction will be based on the average of certain current market rates. During the reporting period, the fund did not utilize the program.

Lines of credit The fund participates, along with other Putnam funds, in a $320 million syndicated unsecured committed line of credit, provided by State Street ($160 million) and JPMorgan Chase Bank, N.A. ($160 million), and a $235.5 million unsecured uncommitted line of credit, provided by State Street. Prior to May 2, 2023, the fund participated, along with other Putnam funds, in a $100 million ($317.5 million prior to October 14, 2022) unsecured committed line of credit and a $235.5 million unsecured uncommitted line of credit, both provided by State Street. Borrowings may be made for temporary or emergency purposes, including the funding of shareholder redemption requests and trade settlements. Interest is charged to the fund based on the fund’s borrowing at a rate equal to 1.25% plus the higher of (1) the Federal Funds rate and (2) the Overnight Bank Funding Rate for the committed line of credit and 1.30% plus the higher of (1) the Federal Funds rate and (2) the Overnight Bank Funding Rate for the uncommitted line of credit. A closing fee equal to 0.04% of the committed line of credit and

30 Core Equity Fund 

 

 

0.04% of the uncommitted line of credit has been paid by the participating funds and a $75,000 fee has been paid by the participating funds to State Street as agent of the syndicated committed line of credit. In addition, a commitment fee of 0.21% per annum on any unutilized portion of the committed line of credit is allocated to the participating funds based on their relative net assets and paid quarterly. During the reporting period, the fund had no borrowings against these arrangements.

Federal taxes It is the policy of the fund to distribute all of its taxable income within the prescribed time period and otherwise comply with the provisions of the Internal Revenue Code of 1986, as amended (the Code), applicable to regulated investment companies. It is also the intention of the fund to distribute an amount sufficient to avoid imposition of any excise tax under Section 4982 of the Code.

The fund is subject to the provisions of Accounting Standards Codification 740 Income Taxes (ASC 740). ASC 740 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The fund did not have a liability to record for any unrecognized tax benefits in the accompanying financial statements. No provision has been made for federal taxes on income, capital gains or unrealized appreciation on securities held nor for excise tax on income and capital gains. Each of the fund’s federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service.

The fund may also be subject to taxes imposed by governments of countries in which it invests. Such taxes are generally based on either income or gains earned or repatriated. The fund accrues and applies such taxes to net investment income, net realized gains and net unrealized gains as income and/or capital gains are earned. In some cases, the fund may be entitled to reclaim all or a portion of such taxes, and such reclaim amounts, if any, are reflected as an asset on the fund’s books. In many cases, however, the fund may not receive such amounts for an extended period of time, depending on the country of investment.

Distributions to shareholders Distributions to shareholders from net investment income are recorded by the fund on the ex-dividend date. Distributions from capital gains, if any, are recorded on the ex-dividend date and paid at least annually. The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. These differences include temporary and/or permanent differences from losses on wash sale transactions, from nontaxable dividends, from unrealized gains and losses on certain futures contracts and from partnership income. Reclassifications are made to the fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations. At the close of the reporting period, the fund reclassified $2,254,147 to increase undistributed net investment income, $3,142 to decrease paid-in capital and $2,251,005 to decrease accumulated net realized gain.

Tax cost of investments includes adjustments to net unrealized appreciation (depreciation) which may not necessarily be final tax cost basis adjustments, but closely approximate the tax basis unrealized gains and losses that may be realized and distributed to shareholders. The tax basis components of distributable earnings and the federal tax cost as of the close of the reporting period were as follows:

Unrealized appreciation  $1,240,557,719 
Unrealized depreciation  (79,412,581) 
Net unrealized appreciation  1,161,145,138 
Undistributed ordinary income  29,089,097 
Undistributed long-term gains  63,021,082 
Cost for federal income tax purposes  $2,085,465,901 

 

Expenses of the Trust Expenses directly charged or attributable to any fund will be paid from the assets of that fund. Generally, expenses of the Trust will be allocated among and charged to the assets of each fund on a basis that the Trustees deem fair and equitable, which may be based on the relative assets of each fund or the nature of the services performed and relative applicability to each fund.

Core Equity Fund 31 

 

 

Note 2: Management fee, administrative services and other transactions

The fund pays Putnam Management a management fee (based on the fund’s average net assets and computed and paid monthly) at annual rates that may vary based on the average of the aggregate net assets of all open-end mutual funds sponsored by Putnam Management (excluding net assets of funds that are invested in, or that are invested in by, other Putnam funds to the extent necessary to avoid “double counting” of those assets). Such annual rates may vary as follows:

0.710%  of the first $5 billion,  0.510%  of the next $50 billion, 
0.660%  of the next $5 billion,  0.490%  of the next $50 billion, 
0.610%  of the next $10 billion,  0.480%  of the next $100 billion and 
0.560%  of the next $10 billion,  0.475%  of any excess thereafter. 

 

For the reporting period, the management fee represented an effective rate (excluding the impact from any expense waivers in effect) of 0.551% of the fund’s average net assets.

Putnam Management has contractually agreed, through August 30, 2023, to waive fees and/or reimburse the fund’s expenses to the extent necessary to limit the cumulative expenses of the fund, exclusive of brokerage, interest, taxes, investment-related expenses, extraordinary expenses, acquired fund fees and expenses and payments under the fund’s investor servicing contract, investment management contract and distribution plans, on a fiscal year-to-date basis to an annual rate of 0.20% of the fund’s average net assets over such fiscal year-to-date period. During the reporting period, the fund’s expenses were not reduced as a result of this limit.

Putnam Investments Limited (PIL), an affiliate of Putnam Management, is authorized by the Trustees to manage a separate portion of the assets of the fund as determined by Putnam Management from time to time. PIL did not manage any portion of the assets of the fund during the reporting period. If Putnam Management were to engage the services of PIL, Putnam Management would pay a quarterly sub-management fee to PIL for its services at an annual rate of 0.25% (prior to July 1, 2022, the annual rate was 0.35%) of the average net assets of the portion of the fund managed by PIL.

The fund reimburses Putnam Management an allocated amount for the compensation and related expenses of certain officers of the fund and their staff who provide administrative services to the fund. The aggregate amount of all such reimbursements is determined annually by the Trustees.

Custodial functions for the fund’s assets are provided by State Street. Custody fees are based on the fund’s asset level, the number of its security holdings and transaction volumes.

Putnam Investor Services, Inc., an affiliate of Putnam Management, provides investor servicing agent functions to the fund. Putnam Investor Services, Inc. received fees for investor servicing for class A, class B, class C, class R and class Y shares that included (1) a per account fee for each direct and underlying non-defined contribution account (retail account) of the fund; (2) a specified rate of the fund’s assets attributable to defined contribution plan accounts; and (3) a specified rate based on the average net assets in retail accounts. Putnam Investor Services, Inc. has agreed that the aggregate investor servicing fees for each fund’s retail and defined contribution accounts for these share classes will not exceed an annual rate of 0.25% of the fund’s average assets attributable to such accounts.

Class R6 shares paid a monthly fee based on the average net assets of class R6 shares at an annual rate of 0.05%.

During the reporting period, the expenses for each class of shares related to investor servicing fees were as follows:

Class A  $3,047,921  Class R  8,256 
Class B  21,406  Class R6  32,961 
Class C  164,259  Class Y  1,106,378 
    Total  $4,381,181 

 

The fund has entered into expense offset arrangements with Putnam Investor Services, Inc. and State Street whereby Putnam Investor Services, Inc.’s and State Street’s fees are reduced by credits allowed on cash balances. For the reporting period, the fund’s expenses were reduced by $20,126 under the expense offset arrangements.

32 Core Equity Fund 

 

 

Each Independent Trustee of the fund receives an annual Trustee fee, of which $2,764, as a quarterly retainer, has been allocated to the fund, and an additional fee for each Trustees meeting attended. Trustees also are reimbursed for expenses they incur relating to their services as Trustees.

The fund has adopted a Trustee Fee Deferral Plan (the Deferral Plan) which allows the Trustees to defer the receipt of all or a portion of Trustees fees payable on or after July 1, 1995. The deferred fees remain invested in certain Putnam funds until distribution in accordance with the Deferral Plan.

The fund has adopted an unfunded noncontributory defined benefit pension plan (the Pension Plan) covering all Trustees of the fund who have served as a Trustee for at least five years and were first elected prior to 2004. Benefits under the Pension Plan are equal to 50% of the Trustee’s average annual attendance and retainer fees for the three years ended December 31, 2005. The retirement benefit is payable during a Trustee’s lifetime, beginning the year following retirement, for the number of years of service through December 31, 2006. Pension expense for the fund is included in Trustee compensation and expenses in the Statement of operations. Accrued pension liability is included in Payable for Trustee compensation and expenses in the Statement of assets and liabilities. The Trustees have terminated the Pension Plan with respect to any Trustee first elected after 2003.

The fund has adopted distribution plans (the Plans) with respect to the following share classes pursuant to Rule 12b–1 under the Investment Company Act of 1940. The purpose of the Plans is to compensate Putnam Retail Management Limited Partnership, an indirect wholly-owned subsidiary of Putnam Investments, LLC, for services provided and expenses incurred in distributing shares of the fund. The Plans provide payments by the fund to Putnam Retail Management Limited Partnership at an annual rate of up to the following amounts (Maximum %) of the average net assets attributable to each class. The Trustees have approved payment by the fund at the following annual rate (Approved %) of the average net assets attributable to each class. During the reporting period, the class-specific expenses related to distribution fees were as follows:

  Maximum %  Approved %  Amount 
Class A  0.35%  0.25%  $5,235,333 
Class B  1.00%  1.00%  147,279 
Class C  1.00%  1.00%  1,129,059 
Class R  1.00%  0.50%  28,333 
Total      $6,540,004 

 

For the reporting period, Putnam Retail Management Limited Partnership, acting as underwriter, received net commissions of $162,008 from the sale of class A shares and received $213 and $681 in contingent deferred sales charges from redemptions of class B and class C shares, respectively.

A deferred sales charge of up to 1.00% is assessed on certain redemptions of class A shares. For the reporting period, Putnam Retail Management Limited Partnership, acting as underwriter, received $99 on class A redemptions.

Note 3: Purchases and sales of securities

During the reporting period, the cost of purchases and the proceeds from sales, excluding short-term investments, were as follows:

  Cost of purchases  Proceeds from sales 
Investments in securities (Long-term)  $383,941,360  $604,332,604 
U.S. government securities (Long-term)  —  — 
Total  $383,941,360  $604,332,604 

 

The fund may purchase or sell investments from or to other Putnam funds in the ordinary course of business, which can reduce the fund’s transaction costs, at prices determined in accordance with SEC requirements and policies approved by the Trustees. During the reporting period, purchases or sales of long-term securities from or to other Putnam funds, if any, did not represent more than 5% of the fund’s total cost of purchases and/or total proceeds from sales.

Core Equity Fund 33 

 

 

Note 4: Capital shares

At the close of the reporting period, there were an unlimited number of shares of beneficial interest authorized. Transactions, including, if applicable, direct exchanges pursuant to share conversions, in capital shares were as follows:

  YEAR ENDED 4/30/23  YEAR ENDED 4/30/22 
Class A  Shares  Amount  Shares  Amount 
Shares sold  3,512,259  $104,908,874  3,671,737  $129,675,292 
Shares issued in connection with         
reinvestment of distributions  3,152,450  91,799,346  5,796,486  198,877,420 
  6,664,709  196,708,220  9,468,223  328,552,712 
Shares repurchased  (6,445,345)  (192,246,653)  (6,016,138)  (212,648,783) 
Net increase  219,364  $4,461,567  3,452,085  $115,903,929 
 
  YEAR ENDED 4/30/23  YEAR ENDED 4/30/22 
Class B  Shares  Amount  Shares  Amount 
Shares sold  1,255  $36,004  6,486  $220,458 
Shares issued in connection with         
reinvestment of distributions  24,056  669,470  66,499  2,201,105 
  25,311  705,474  72,985  2,421,563 
Shares repurchased  (343,395)  (9,898,950)  (315,474)  (10,735,097) 
Net decrease  (318,084)  $(9,193,476)  (242,489)  $(8,313,534) 
 
  YEAR ENDED 4/30/23  YEAR ENDED 4/30/22 
Class C  Shares  Amount  Shares  Amount 
Shares sold  638,441  $18,123,081  587,981  $19,991,367 
Shares issued in connection with         
reinvestment of distributions  182,052  5,053,755  382,473  12,629,259 
  820,493  23,176,836  970,454  32,620,626 
Shares repurchased  (1,591,640)  (45,351,911)  (1,494,368)  (50,567,428) 
Net decrease  (771,147)  $(22,175,075)  (523,914)  $(17,946,802) 
 
  YEAR ENDED 4/30/23  YEAR ENDED 4/30/22 
Class R  Shares  Amount  Shares  Amount 
Shares sold  70,116  $2,048,227  68,209  $2,453,666 
Shares issued in connection with         
reinvestment of distributions  9,702  280,187  12,693  432,976 
  79,818  2,328,414  80,902  2,886,642 
Shares repurchased  (27,690)  (824,941)  (24,439)  (865,513) 
Net increase  52,128  $1,503,473  56,463  $2,021,129 

 

34 Core Equity Fund 

 

 

  YEAR ENDED 4/30/23  YEAR ENDED 4/30/22 
Class R6  Shares  Amount  Shares  Amount 
Shares sold  409,819  $12,455,081  734,652  $26,146,283 
Shares issued in connection with         
reinvestment of distributions  109,226  3,206,865  163,187  5,643,013 
  519,045  15,661,946  897,839  31,789,296 
Shares repurchased  (384,913)  (11,556,130)  (284,361)  (10,006,410) 
Net increase  134,132  $4,105,816  613,478  $21,782,886 
 
  YEAR ENDED 4/30/23  YEAR ENDED 4/30/22 
Class Y  Shares  Amount  Shares  Amount 
Shares sold  7,640,785  $231,486,328  9,305,077  $330,337,450 
Shares issued in connection with         
reinvestment of distributions  1,183,636  34,727,870  1,885,003  65,145,697 
  8,824,421  266,214,198  11,190,080  395,483,147 
Shares repurchased  (6,677,902)  (200,268,126)  (4,499,173)  (158,147,110) 
Net increase  2,146,519  $65,946,072  6,690,907  $237,336,037 

 

Note 5: Affiliated transactions

Transactions during the reporting period with any company which is under common ownership or control were as follows:

          Shares 
          outstanding 
          and fair 
  Fair value as  Purchase  Sale  Investment  value as 
Name of affiliate  of 4/30/22  cost  proceeds  income  of 4/30/23 
Short-term investments           
Putnam Cash Collateral           
Pool, LLC*  $48,913,014  $913,198,376  $912,634,847  $2,166,741  $49,476,543 
Putnam Short Term           
Investment Fund**  79,382,906  358,780,855  277,567,180  4,804,329  160,596,581 
Total Short-term           
investments  $128,295,920  $1,271,979,231  $1,190,202,027  $6,971,070  $210,073,124 

 

* No management fees are charged to Putnam Cash Collateral Pool, LLC (Note 1).Investment income shown is included in securities lending income on the Statement of operations. There were no realized or unrealized gains or losses during the period.

** Management fees charged to Putnam Short Term Investment Fund have been waived by Putnam Management. There were no realized or unrealized gains or losses during the period.

Note 6: Market, credit and other risks

In the normal course of business, the fund trades financial instruments and enters into financial transactions where risk of potential loss exists due to changes in the market (market risk) or failure of the contracting party to the transaction to perform (credit risk). The fund may be exposed to additional credit risk that an institution or other entity with which the fund has unsettled or open transactions will default. Investments in foreign securities involve certain risks, including those related to economic instability, unfavorable political developments, and currency fluctuations.

Core Equity Fund 35 

 

 

Note 7: Summary of derivative activity

The volume of activity for the reporting period for any derivative type that was held during the period is listed below and was based on an average of the holdings at the end of each fiscal quarter:

Purchased equity option contracts (contract amount)  $—* 
Written equity option contracts (contract amount)  $220,000 
Futures contracts (number of contracts)  1,000 

 

* For the reporting period, there were no holdings at the end of each fiscal quarter and the transactions were considered minimal.

The following is a summary of the fair value of derivative instruments as of the close of the reporting period:

Fair value of derivative instruments as of the close of the reporting period   
  ASSET DERIVATIVES  LIABILITY DERIVATIVES 
Derivatives not         
accounted for as  Statement of    Statement of   
hedging instruments  assets and    assets and   
under ASC 815  liabilities location  Fair value  liabilities location  Fair value 
  Receivables, Net       
  assets — Unrealized    Payables, Net assets —   
Equity contracts  appreciation  $5,449,720*  Unrealized depreciation  $431,262* 
Total    $5,449,720    $431,262 

 

* Includes cumulative appreciation/depreciation of futures contracts as reported in the fund’s portfolio. Only current day’s variation margin is reported within the Statement of assets and liabilities.

The following is a summary of realized and change in unrealized gains or losses of derivative instruments in the Statement of operations for the reporting period (Note 1):

Amount of realized gain or (loss) on derivatives recognized in net gain or (loss) on investments 
Derivatives not accounted for as hedging       
instruments under ASC 815  Options  Futures  Total 
Equity contracts  $685,550  $(15,117,176)  $(14,431,626) 
Total  $685,550  $(15,117,176)  $(14,431,626) 

 

Change in unrealized appreciation or (depreciation) on derivatives recognized in net gain or (loss) 
on investments     
Derivatives not accounted for as     
hedging instruments under ASC 815  Futures  Total 
Equity contracts  $8,137,682  $8,137,682 
Total  $8,137,682  $8,137,682 

 

36 Core Equity Fund 

 

 

Note 8: Offsetting of financial and derivative assets and liabilities

The following table summarizes any derivatives, repurchase agreements and reverse repurchase agreements, at the end of the reporting period, that are subject to an enforceable master netting agreement or similar agreement. For securities lending transactions or borrowing transactions associated with securities sold short, if any, see Note 1. For financial reporting purposes, the fund does not offset financial assets and financial liabilities that are subject to the master netting agreements in the Statement of assets and liabilities.

    Citigroup Global   
  BofA Securities, Inc.  Markets, Inc.  Total 
Assets:       
Futures contracts§  $1,399,501  $—  $1,399,501 
Repurchase agreements **  —  40,544,000  40,544,000 
Total Assets  $1,399,501  $40,544,000  $41,943,501 
Liabilities:       
Futures contracts§  —  —  — 
Total Liabilities  $—  $—  $— 
Total Financial and Derivative Net Assets  $1,399,501  $40,544,000  $41,943,501 
Total collateral received (pledged)†##  $—  $40,544,000   
Net amount  $1,399,501  $—   
Controlled collateral received (including       
TBA commitments)**  $—  $—  $— 
Uncontrolled collateral received  $—  $41,357,218  $41,357,218 
Collateral (pledged) (including TBA commitments)**  $—  $—  $— 

 

** Included with Investments in securities on the Statement of assets and liabilities.

† Additional collateral may be required from certain brokers based on individual agreements.

##Any over-collateralization of total financial and derivative net assets is not shown. Collateral may include amounts related to unsettled agreements.

§ Includes current day’s variation margin only as reported on the Statement of assets and liabilities, which is not collateralized. Cumulative appreciation/(depreciation) for futures contracts is represented in the tables listed after the fund’s portfolio. Collateral pledged for initial margin on futures contracts, which is not included in the table above, amounted to $11,147,857.

Note 9: Subsequent event

On May 31, 2023, Franklin Resources, Inc. (“Franklin Resources”) and Great-West Lifeco Inc., the parent company of Putnam U.S. Holdings I, LLC (“Putnam Holdings”), announced that they have entered into a definitive agreement for a subsidiary of Franklin Resources to acquire Putnam Holdings in a stock and cash transaction.

As part of this transaction, Putnam Management, a wholly owned subsidiary of Putnam Holdings and investment manager to the Putnam family of funds (the “Putnam Funds”), would become an indirect wholly owned subsidiary of Franklin Resources.

The transaction is subject to customary closing conditions, including receipt of applicable regulatory approvals. Subject to such approvals and the satisfaction of these conditions, the transaction is currently expected to be consummated in the fourth quarter of 2023.

Under the Investment Company Act of 1940, as amended, consummation of the transaction will result in the automatic termination of the investment management contract between each Putnam Fund and Putnam Management and any related sub-management and sub-advisory contracts, where applicable. Therefore, the Board of Trustees of the Putnam Funds will be asked to approve a new investment management contract between each Putnam Fund and Putnam Management (and new sub-management and sub-advisory contracts, if applicable). If approved by the Board of Trustees, the new investment management contract will be presented to the shareholders of each Putnam Fund for their approval.

Core Equity Fund 37 

 

 

Federal tax information (Unaudited)

Pursuant to §852 of the Internal Revenue Code, as amended, the fund hereby designates $70,216,317 as a capital gain dividend with respect to the taxable year ended April 30, 2023, or, if subsequently determined to be different, the net capital gain of such year.

The fund designated 100.00% of ordinary income distributions as qualifying for the dividends received deduction for corporations.

For the reporting period, the fund hereby designates 100.00%, or the maximum amount allowable, of its taxable ordinary income distributions as qualified dividends taxed at the individual net capital gain rates.

For the reporting period, pursuant to §871(k) of the Internal Revenue Code, the fund hereby designates $85,848 of distributions paid as qualifying to be taxed as interest-related dividends, and no monies to be taxed as short-term capital gain dividends for nonresident alien shareholders.

The Form 1099 that will be mailed to you in January 2024 will show the tax status of all distributions paid to your account in calendar 2023.

38 Core Equity Fund 

 

 


Core Equity Fund 39 

 

 


* Mr. Reynolds is an “interested person” (as defined in the Investment Company Act of 1940) of the fund and Putnam Investments. He is President and Chief Executive Officer of Putnam Investments, as well as the President of your fund and each of the other Putnam funds.

The address of each Trustee is 100 Federal Street, Boston, MA 02110.

As of April 30, 2023, there were 88 mutual funds, 4 closed-end funds, and 12 exchange-traded funds in the Putnam funds complex. Each Trustee serves as Trustee of all funds in the Putnam funds complex.

Each Trustee serves for an indefinite term, until his or her resignation, retirement at age 75, removal, or death.

40 Core Equity Fund 

 

 

Officers

In addition to Robert L. Reynolds, the other officers of the fund are shown below:

James F. Clark (Born 1974)  Alan G. McCormack (Born 1964) 
Vice President and Chief Compliance Officer  Vice President and Derivatives Risk Manager 
Since 2016  Since 2022 
Chief Compliance Officer and Chief Risk Officer,  Head of Quantitative Equities and Risk, 
Putnam Investments, and Chief Compliance Officer,  Putnam Investments 
Putnam Management 
Denere P. Poulack (Born 1968) 
Michael J. Higgins (Born 1976)  Assistant Vice President, Assistant Clerk, 
Vice President, Treasurer, and Clerk  and Assistant Treasurer 
Since 2010  Since 2004 
 
Jonathan S. Horwitz (Born 1955)  Janet C. Smith (Born 1965) 
Executive Vice President, Principal Executive Officer,  Vice President, Principal Financial Officer, Principal 
and Compliance Liaison  Accounting Officer, and Assistant Treasurer 
Since 2004  Since 2007 
  Head of Fund Administration Services, 
Richard T. Kircher (Born 1962)  Putnam Investments and Putnam Management 
Vice President and BSA Compliance Officer   
Since 2019  Stephen J. Tate (Born 1974) 
Assistant Director, Operational Compliance, Putnam  Vice President and Chief Legal Officer 
Investments and Putnam Retail Management  Since 2021 
  General Counsel, Putnam Investments, 
Martin Lemaire (Born 1984)  Putnam Management, and Putnam Retail Management 
Vice President and Derivatives Risk Manager   
Since 2022  Mark C. Trenchard (Born 1962) 
Risk Manager and Risk Analyst, Putnam Investments  Vice President 
  Since 2002 
Susan G. Malloy (Born 1957)  Director of Operational Compliance, Putnam 
Vice President and Assistant Treasurer  Investments and Putnam Retail Management 
Since 2007   
Head of Accounting and Middle Office Services,   
Putnam Investments and Putnam Management   

 

The principal occupations of the officers for the past five years have been with the employers as shown above, although in some cases they have held different positions with such employers. The address of each officer is 100 Federal Street, Boston, MA 02110.

Core Equity Fund 41 

 

 

Putnam family of funds

The following is a list of Putnam’s open-end mutual funds offered to the public. Investors should carefully consider the investment objective, risks, charges, and expenses of a fund before investing. For a prospectus, or a summary prospectus if available, containing this and other information for any Putnam fund or product, contact your financial advisor or call Putnam Investor Services at 1-800-225-1581. Please read the prospectus carefully before investing.

Blend  Income 
Core Equity Fund  Convertible Securities Fund 
Emerging Markets Equity Fund  Core Bond Fund 
Focused Equity Fund  Diversified Income Trust 
Focused International Equity Fund  Floating Rate Income Fund 
International Capital Opportunities Fund  Global Income Trust 
International Equity Fund  Government Money Market Fund* 
Research Fund  High Yield Fund 
Income Fund 
Global Sector  Money Market Fund† 
Global Health Care Fund  Mortgage Opportunities Fund 
Global Technology Fund  Mortgage Securities Fund 
Short Duration Bond Fund 
Growth  Ultra Short Duration Income Fund 
Large Cap Growth Fund   
Small Cap Growth Fund  Tax-free Income 
Sustainable Future Fund  Intermediate-Term Municipal Income Fund 
Sustainable Leaders Fund  Short-Term Municipal Income Fund 
Strategic Intermediate Municipal Fund 
Value  Tax Exempt Income Fund 
International Value Fund  Tax-Free High Yield Fund 
Large Cap Value Fund   
Small Cap Value Fund  State tax-free income funds:‡ 
  California, Massachusetts, Minnesota, 
  New Jersey, New York, Ohio, and Pennsylvania 

 

42 Core Equity Fund 

 

 

Asset Allocation  Asset Allocation (cont.) 
George Putnam Balanced Fund  Retirement Advantage Maturity Fund 
Retirement Advantage 2065 Fund 
Dynamic Asset Allocation Balanced Fund  Retirement Advantage 2060 Fund 
Dynamic Asset Allocation Conservative Fund  Retirement Advantage 2055 Fund 
Dynamic Asset Allocation Growth Fund  Retirement Advantage 2050 Fund 
Retirement Advantage 2045 Fund 
Multi-Asset Income Fund  Retirement Advantage 2040 Fund 
  Retirement Advantage 2035 Fund 
  Retirement Advantage 2030 Fund 
  Retirement Advantage 2025 Fund 
 
  Sustainable Retirement Maturity Fund 
  Sustainable Retirement 2065 Fund 
  Sustainable Retirement 2060 Fund 
  Sustainable Retirement 2055 Fund 
  Sustainable Retirement 2050 Fund 
  Sustainable Retirement 2045 Fund 
  Sustainable Retirement 2040 Fund 
  Sustainable Retirement 2035 Fund 
  Sustainable Retirement 2030 Fund 
  Sustainable Retirement 2025 Fund 

 

* You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.

† You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The fund may impose a fee upon sale of your shares or may temporarily suspend your ability to sell shares if the fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.

‡ Not available in all states.

Check your account balances and the most recent month-end performance in the Individual Investors section at putnam.com.

Core Equity Fund 43 

 

 

Services for shareholders

Investor services

Systematic investment plan Tell us how much you wish to invest regularly — weekly, semimonthly, or monthly — and the amount you choose will be transferred automatically from your checking or savings account. There’s no additional fee for this service, and you can suspend it at any time. This plan may be a great way to save for college expenses or to plan for your retirement.

Please note that regular investing does not guarantee a profit or protect against loss in a declining market. Before arranging a systematic investment plan, consider your financial ability to continue making purchases in periods when prices are low.

Systematic exchange You can make regular transfers from one Putnam fund to another Putnam fund. There are no additional fees for this service, and you can cancel or change your options at any time.

Dividends PLUS You can choose to have the dividend distributions from one of your Putnam funds automatically reinvested in another Putnam fund at no additional charge.

Free exchange privilege You can exchange money between Putnam funds free of charge, as long as they are the same class of shares. A signature guarantee is required if you are exchanging more than $500,000. The fund reserves the right to revise or terminate the exchange privilege.

Reinstatement privilege If you’ve sold Putnam shares or received a check for a dividend or capital gain, you may reinvest the proceeds with Putnam within 90 days of the transaction and they will be reinvested at the fund’s current net asset value — with no sales charge. However, reinstatement of class B shares may have special tax consequences. Ask your financial or tax representative for details.

Check-writing service You have ready access to many Putnam accounts. It’s as simple as writing a check, and there are no special fees or service charges. For more information about the check-writing service, call Putnam or visit our website.

Dollar cost averaging When you’re investing for long-term goals, it’s time, not timing, that counts. Investing on a systematic basis is a better strategy than trying to figure out when the markets will go up or down. This means investing the same amount of money regularly over a long period. This method of investing is called dollar cost averaging. When a fund’s share price declines, your investment dollars buy more shares at lower prices. When it increases, they buy fewer shares. Over time, you will pay a lower average price per share.

For more information

Visit the Individual Investors section at putnam.com A secure section of our website contains complete information on your account, including balances and transactions, updated daily. You may also conduct transactions, such as exchanges, additional investments, and address changes. Log on today to get your password.

Call us toll free at 1-800-225-1581 or, for exchange-traded funds only, 1-833-228-5577 Ask a helpful Putnam representative or your financial advisor for details about any of these or other services, or see your prospectus.

44 Core Equity Fund 

 

 

Fund information

Founded over 85 years ago, Putnam Investments was built around the concept that a balance between risk and reward is the hallmark of a well-rounded financial program. We manage funds across income, value, blend, growth, sustainable, and asset allocation categories.

Investment Manager  Trustees  Richard T. Kircher 
Putnam Investment  Kenneth R. Leibler, Chair  Vice President and 
Management, LLC  Barbara M. Baumann, Vice Chair  BSA Compliance Officer 
100 Federal Street  Liaquat Ahamed   
Boston, MA 02110  Katinka Domotorffy  Martin Lemaire 
  Catharine Bond Hill  Vice President and 
Investment Sub-Advisor  Jennifer Williams Murphy  Derivatives Risk Manager 
Putnam Investments Limited  Marie Pillai 
16 St James’s Street  George Putnam III  Susan G. Malloy 
London, England SW1A 1ER  Robert L. Reynolds  Vice President and 
Manoj P. Singh  Assistant Treasurer 
Marketing Services  Mona K. Sutphen 
Putnam Retail Management    Alan G. McCormack 
Limited Partnership  Officers  Vice President and 
100 Federal Street  Robert L. Reynolds  Derivatives Risk Manager 
Boston, MA 02110  President 
    Denere P. Poulack 
Custodian  James F. Clark  Assistant Vice President, 
State Street Bank  Vice President, Chief Compliance  Assistant Clerk, and 
and Trust Company  Officer, and Chief Risk Officer  Assistant Treasurer 
   
Legal Counsel  Michael J. Higgins  Janet C. Smith 
Ropes & Gray LLP  Vice President, Treasurer,  Vice President, 
and Clerk  Principal Financial Officer, 
Independent Registered  Principal Accounting Officer, 
Public Accounting Firm  Jonathan S. Horwitz  and Assistant Treasurer 
PricewaterhouseCoopers LLP  Executive Vice President, 
  Principal Executive Officer,  Stephen J. Tate 
  and Compliance Liaison  Vice President and 
    Chief Legal Officer 
   
Mark C. Trenchard 
Vice President 

 

This report is for the information of shareholders of Putnam Core Equity Fund. It may also be used as sales literature when preceded or accompanied by the current prospectus, the most recent copy of Putnam’s Quarterly Performance Summary, and Putnam’s Quarterly Ranking Summary. For more recent performance, please visit putnam.com. Investors should carefully consider the investment objectives, risks, charges, and expenses of a fund, which are described in its prospectus. For this and other information or to request a prospectus or summary prospectus, call 1-800-225-1581 toll free. Please read the prospectus carefully before investing. The fund’s Statement of Additional Information contains additional information about the fund’s Trustees and is available without charge upon request by calling 1-800-225-1581.

 


Item 2. Code of Ethics:
(a) The fund’s principal executive, financial and accounting officers are employees of Putnam Investment Management, LLC, the Fund’s investment manager. As such they are subject to a comprehensive Code of Ethics adopted and administered by Putnam Investments which is designed to protect the interests of the firm and its clients. The Fund has adopted a Code of Ethics which incorporates the Code of Ethics of Putnam Investments with respect to all of its officers and Trustees who are employees of Putnam Investment Management, LLC. For this reason, the Fund has not adopted a separate code of ethics governing its principal executive, financial and accounting officers.

(c) In January 2023, the Code of Ethics of Putnam Investments and Code of Ethics of Putnam Funds were amended. The key changes to the Putnam Investments Code of Ethics are as follows: (i) Prohibition on investments in a single stock ETFs and (ii) Revision to the 7-day blackout rule for Analysts. The key change to the Putnam Funds Code of Ethics was that the provisions of the Code of Ethics for employees of PanAgora Asset Management, inc. and any of its subsidiaries are excluded from the Putnam Funds’ Code of Ethics.

Item 3. Audit Committee Financial Expert:
The Funds’ Audit, Compliance and Risk Committee is comprised solely of Trustees who are “independent” (as such term has been defined by the Securities and Exchange Commission (“SEC”) in regulations implementing Section 407 of the Sarbanes-Oxley Act (the “Regulations”)). The Trustees believe that each member of the Audit, Compliance and Risk Committee also possesses a combination of knowledge and experience with respect to financial accounting matters, as well as other attributes, that qualifies him or her for service on the Committee. In addition, the Trustees have determined that each of Dr. Hill, Ms. Murphy and Mr. Singh qualifies as an “audit committee financial expert” (as such term has been defined by the Regulations) based on their review of his or her pertinent experience and education.The SEC has stated, and the funds’ amended and restated agreement and Declaration of Trust provides, that the designation or identification of a person as an audit committee financial expert pursuant to this Item 3 of Form N-CSR does not impose on such person any duties, obligations or liability that are greater than the duties, obligations and liability imposed on such person as a member of the Audit, Compliance and Risk Committee and the Board of Trustees in the absence of such designation or identification.

Item 4. Principal Accountant Fees and Services:
The following table presents fees billed in each of the last two fiscal years for services rendered to the fund by the fund’s independent auditor:


Fiscal year ended Audit Fees Audit-Related Fees Tax Fees All Other Fees
April 30, 2023 $62,262 $ — $7,028 $ —
April 30, 2022 $49,058 $ — $7,886 $ —

For the fiscal years ended April 30, 2023 and April 30, 2022, the fund’s independent auditor billed aggregate non-audit fees in the amounts of $249,039 and $336,837 respectively, to the fund, Putnam Management and any entity controlling, controlled by or under common control with Putnam Management that provides ongoing services to the fund.

Audit Fees represent fees billed for the fund’s last two fiscal years relating to the audit and review of the financial statements included in annual reports and registration statements, and other services that are normally provided in connection with statutory and regulatory filings or engagements.

Audit-Related Fees represent fees billed in the fund’s last two fiscal years for services traditionally performed by the fund’s auditor, including accounting consultation for proposed transactions or concerning financial accounting and reporting standards and other audit or attest services not required by statute or regulation.

Tax Fees represent fees billed in the fund’s last two fiscal years for tax compliance, tax planning and tax advice services. Tax planning and tax advice services include assistance with tax audits, employee benefit plans and requests for rulings or technical advice from taxing authorities.

Pre-Approval Policies of the Audit, Compliance and Risk Committee. The Audit, Compliance and Risk Committee of the Putnam funds has determined that, as a matter of policy, all work performed for the funds by the funds’ independent auditors will be pre-approved by the Committee itself and thus will generally not be subject to pre-approval procedures.

The Audit, Compliance and Risk Committee also has adopted a policy to pre-approve the engagement by Putnam Management and certain of its affiliates of the funds’ independent auditors, even in circumstances where pre-approval is not required by applicable law. Any such requests by Putnam Management or certain of its affiliates are typically submitted in writing to the Committee and explain, among other things, the nature of the proposed engagement, the estimated fees, and why this work should be performed by that particular audit firm as opposed to another one. In reviewing such requests, the Committee considers, among other things, whether the provision of such services by the audit firm are compatible with the independence of the audit firm.

The following table presents fees billed by the fund’s independent auditor for services required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2–01 of Regulation S-X.


Fiscal year ended Audit-Related Fees Tax Fees All Other Fees Total Non-Audit Fees
April 30, 2023 $ — $242,011 $ — $ —
April 30, 2022 $ — $328,951 $ — $ —

Item 5. Audit Committee of Listed Registrants
Not applicable

Item 6. Schedule of Investments:
The registrant’s schedule of investments in unaffiliated issuers is included in the report to shareholders in Item 1 above.

Item 7. Disclosure of Proxy Voting Policies and Procedures For Closed-End Management Investment Companies:
Not applicable

Item 8. Portfolio Managers of Closed-End Investment Companies
Not Applicable

Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers:
Not applicable

Item 10. Submission of Matters to a Vote of Security Holders:
Not applicable

Item 11. Controls and Procedures:
(a) The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant’s disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms.

(b) Changes in internal control over financial reporting: Not applicable

Item 12. Disclosures of Securities Lending Activities for Closed-End Management Investment Companies:
Not Applicable

Item 13. Exhibits:
(a)(1) The Code of Ethics of The Putnam Funds, which incorporates the Code of Ethics of Putnam Investments, is filed herewith.

(a)(2) Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith.

(b) The certifications required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended, are filed herewith.

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Putnam Funds Trust
By (Signature and Title):
/s/ Janet C. Smith
Janet C. Smith
Principal Accounting Officer

Date: June 28, 2023
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title):
/s/ Jonathan S. Horwitz
Jonathan S. Horwitz
Principal Executive Officer

Date: June 28, 2023
By (Signature and Title):
/s/ Janet C. Smith
Janet C. Smith
Principal Financial Officer

Date: June 28, 2023